Tag Archives: dombrovskis

Just days after former prime minister Valdis Dombrovskis was nominated as the European Commission’s vice president for the euro and social dialogue, his successor back home in Latvia is fighting to keep Dombrovskis’s party in power after five tumultuous years.

Laimdota Straujuma, a former civil servant and, until her election as prime minister on January 22, Latvia’s agriculture minister, will attempt to win another mandate on October 4 for the broad center-right coalition government that, in the form of many different parties and combinations, has governed Latvia since its independence in 1993. Dombrovskis’s newly formed party, Vienotība (Unity), the fusion of an alliance of several center-right liberal parties, won Latvia’s October 2010 elections and, though it finished in third place in the most recent September 2011 snap elections, it continues to govern in alliance with three other center-right and populist parties.

If Straujuma (pictured above) is successful, she should send flowers to the Kremlin, because Russia’s newly aggressive tone with respect to its ‘near abroad’ has become a leading factor during the campaign.

When Dombrovskis became prime minister in 2009 amid the global financial crisis, Latvia was facing its worst economic turmoil since the post-Soviet adjustment of the early 1990s. Dombrovskis prevented a devaluation of the lats currency, salvaging Latvian hopes to enter the eurozone (it did in January 2014).

But Dombrovskis’s orthodox economic policy forced budget cuts and a steep internal devaluation and boosted Latvia’s unemployment rate in 2009 to what was then a EU-wide high of 20%, which today rests just above 11%. Though growth has bounced back, Dombrovskis resigned last December after a freak accident in a suburb of Riga, the Latvian capital, when a supermarket roof collapsed and killed 54 people.

In a normal election, with a weary Latvian electorate, it wouldn’t be unreasonable to expect its center-left party to take advantage of years of austerity to form what would be Latvia’s first truly center-left government.

What’s more, Latvia’s center-left party, Sociāldemokrātiskā Partija ‘Saskaņa’ (Social Democratic Party “Harmony,” which previously contested Latvian elections as the wider ‘Harmony Centre’ alliance), was on something on an upswing, winning the largest number of seats in the 2011 elections (31) in the Saeima, the 100-member, unicameral Latvian parliament, and it made even stronger breakthroughs in the 2013 local elections, when Harmony took control of the Riga city council.

But what held Harmony Centre and now, the ‘Harmony’/Social Democratic Party back was its historical role as a party supported mostly by ethnic Russians and Russian speakers. Though Latvia has the largest ethnic Russian population of the three Baltic states (around 26.9%), that’s not a large enough support base to build a majoritarian government. Continue reading Latvian right hopes to ride Russia threat to reelection→

On Wednesday, the incoming president of the European Commission, Jean-Claude Juncker (pictured above), released full details on the proposed commissioners within his Commission, which will serve as the chief executive and administrative body of the European Union between 2014 and 2019.

The most important feature of the proposed Juncker Commission is that he’s introduced the greatest amount of hierarchy in an institution that used to be flat. It’s not a secret that some portfolios have always been more desirable than others, especially as the Commission has expanded to include all 28 member-states. But Juncker has introduced a first vice president and five vice presidents, who will also serve alongside Italy’s foreign minister Federica Mogherini, who was appointed two weeks ago to serve as Commission vice president and high representative for foreign affairs and security policy.

The delegation of so much power to five ‘super-commissioners’ with roving, supervisory briefs indicates that Juncker intends to be a much less hands-on Commission president that his predecessor, José Manuel Barroso. But it also reflects a Commission that, including Luxembourg’s Juncker, contains five former prime ministers (Finland, Slovenia, Latvia and Estonia). It also contains four incumbents (Germany, Sweden, Bulgaria and Austria) who have served throughout the full second term of the Barroso Commission. That makes the Juncker Commission possibly the most distinguished in EU history.

Each commissioner must be approved by the European parliament and, while individual nominees have had troubles in the past, the parliament typically approves the vast majority of a Commission president’s appointments, all of whom were nominated by their respective national governments.

With nine women, it’s not as unbalanced as feared even a week or two ago, and with 14 members of the center-right European People’s Party (EPP), eight members of the center-left Party of European Socialists (PES) and five members of the Alliance of Liberals and Democrats for Europe (ALDE), it generally reflects the results of the May 25 European parliamentary elections, though some social democrats and socialists are grumbling that the left doesn’t have enough representation.

The European Council appointed Polish prime minister Donald Tusk as Council president and nominated Italian foreign minister Federica Mogherini as its new high representative for foreign affairs and security policy.

The appointments of both Mogherini and Tusk were widely expected in the days and hours leading up to today’s EU summit.

Tusk (pictured above, left, with his predecessor, Herman Van Rompuy), age 57, was first elected prime minister in 2007 and reelected in 2011 as the leader of the center-right Platforma Obywatelska (PO, Civic Platform), each time defeating the more conservative, nationalist Prawo i Sprawiedliwość (PiS, Law and Justice). Essentially a moderate liberal and European federalist, Tusk has governed Poland for seven of the 10 years during which it’s been a member of the European Union. His elevation to the Council presidency marks the first time that a central or eastern European has held a top EU office, and it reflects Poland’s growing clout as one of the engines of the European Union.

Mogherini (pictured above, right, with her predecessor, Baroness Catherine Ashton), age 41, only recently became Italy’s foreign minister in February, when prime minister Matteo Renzi maneuvered his way into the premiership. Though some Baltic and eastern European leaders doubted her level of experience and questioned whether she might be too sympathetic to Russia, she’s received strong marks in her six months as Italy’s foreign minister, marking her as a rising star in the new generation of leaders in Renzi’s center-left Partito Democratico (PD, Democratic Party).

Together with Jean-Claude Juncker, the former Luxembourg prime minister, who was nominated by the Council in June as the president of the European Commission, the EU’s chief executive and regulatory body, Tusk and Mogherini will be responsible for setting EU policy through 2019.

The Council presidency was created by the Treaty of Lisbon, which came into effect only in 2009. Before Lisbon, the Council president was simply the leader of the country that held the six-month rotating Council presidency. Van Rompuy, a former Belgian prime minister, served as the inaugural Council president. Upon the Council’s decision today, Tusk will begin his first term of 2.5 years in December, with the option for reappointment to a second term of 2.5 years.

The high representative role existed prior to the Lisbon Treaty, but it was greatly expanded when Ashton, a former Labour member of the House of Lords, was appointed to the role in 2009. Technically, Mogherini will serve as Italy’s representative on the European Commission and, accordingly, her term will run for five years and is subject to the approval of the European parliament.

Given their different backgrounds, Tusk and Mogherini were viewed as a complementary team. Eastern and central Europeans are delighted to see Tusk, a relatively hawkish voice on Russia, elevated to the Council presidency. Meanwhile, Mogherini brings gender diversity to the Commission, and she will join Martin Schulz, a German social democrat, as the chief voice of the center-left at the top of the EU policymaking apparatus.

When the European Council meets on Saturday for a summit of all 28 leaders within the European Union, it will not only choose a new high representative for foreign affairs and security policy, but also a new president of the European Council.

It’s still very much a new role within the matrix of EU power — it was created only in 2007 as part of the Treaty of Lisbon, and Herman Van Rompuy, a former liberal Belgian prime minister, was selected in 2009 to take the role when the Lisbon Treaty came into effect.

For a position that had been, perhaps too optimistically described as the ‘presidency of Europe,’ Van Rompuy has hardly been the European Union’s George Washington. For more than three decades, the ‘president’ of the European Council, which is really just the collection of all 28 EU leaders, was the head of state or government of the country that held the six-month rotating Council presidency. That Council presidency still rotates (Italy is currently heading the Council), but the Lisbon Treaty created a full-time figure who could fill up to two 2.5-year terms to direct Council and EU policy.

But it hasn’t exactly been clear when the power of the European Commission, the chief executive and administrative body of the European Union, ends and the European Council presidency’s power begins. Often in the past five years, the roles of Van Rompuy and outgoing Commission president José Manuel Barroso, a former conservative Portuguese prime minister, have blurred.

Defining those lines will certainly be one of the most vital institutional issues that incoming Commission president Jean-Claude Juncker, a former Christian democratic prime minister of Luxembourg, and his Council counterpart, will determine in the next five years.

Even in the past 24 hours, news reports give the young Italian foreign minister Federica Mogherini an even greater edge to become Europe’s next high representative for foreign affairs and security policy, seemingly eclipsing the chances of Polish prime minister Radek Sikorski and Bulgarian European commissioner Kristalina Georgieva.

But it’s clear that the Council presidency role will follow from two factors — first, the June decision to appoint Juncker as the Commission president and, second, the decision in the next 36 hours over Europe’s foreign policy supremo.

If it’s Mogherini, as expected, the conventional wisdom is that, as Mogherini is a center-left, Italian woman, the Council presidency must go to an official from Central and Eastern Europe. That points to Polish prime minister Donald Tusk (pictured above) as the wide frontrunner for the Council presidency. If, for some reason, Tusk turns down the idea of moving from Warsaw to Brussels, former Latvian prime minister Valdis Dombrovskis, former Estonian prime minister Andrus Ansip or former Finnish prime minister Jykri Katainen, all of whom are already candidates to serve as their respective countries’ commissioners in Brussels, are ready alternatives.

If it’s Sikorski, which now seems less and less likely, the conventional wisdom is that a center-right Polish official will require the balance of a center-left woman. The frontrunner would then be Danish prime minister Helle Thorning-Schmidt.

If it’s the dark-horse candidate, Georgieva, a Bulgarian and the current European commissioner for humanitarian aid, there won’t be incredible pressure to appoint a woman as Council president, but there will be pressure to appoint a center-left official, which still favors Thorning-Schmidt. Nevertheless, a surprise choice like Georgieva for foreign policy could open deliberations to truly dark-horse candidates, including liberals like Ansip or former Commission presidential candidate and former Belgian prime minister Guy Verhofstadt.

Earlier this week, Estonia’s prime minister Andrus Ansip stepped down after nine years leading the tiny Baltic country of just 1.3 million.

His departure brings even more change to the Baltic states — Laimdota Straujuma became Latvia’s new prime minister in January following the resignation of Valdis Dombrovskis over the collapse of a supermarket roof near Riga, the Latvian capital, that killed 54 people.

Ansip and Dombrovskis share a lot in common, both in terms of politics and the policy trajectories of their governments.

Like Ansip, Dombrovskis stepped down having presided over difficult economic reforms that stabilized their country’s respective credit ratings and credibility with global debt markets and that helped unleash economic growth after the immediate downturn of the global economic crisis and the European debt crisis. Both prime ministers, uncharacteristically, won reelection in the middle of implementing some fairly hefty budget cuts (enough to lower Estonian public debt to just 5.7% of GDP as of 2012) — Ansip most recently in the March 2011 elections, when Reform actually gained two seats (for a total of 33) in the 101-member Riigikogu, the Estonian parliament.

Ansip ushered his country into the eurozone in 2011, the first of the Baltic states to do so, and Dombrovskis’s government followed, with Latvia acceding to the eurozone on January 1 of this year.

Just as Latvia’s governing center-right Vienotība (Unity) faces a difficult election in October later this year, Ansip’s own center-right Eesti Reformierakond (Estonian Reform Party) faces a similarly difficult challenge in elections expected to take place in March 2015. Continue reading Considering Andrus Ansip’s legacy in Estonia→

On January 1, when Latvia celebrated its accession to the eurozone as the 18th member to embrace the single currency, it should have been a moment for Latvian prime minister Valdis Dombrovskis to celebrate shepherding his country into the core of Europe just barely two decades after its independence from the Soviet Union.

Instead, Dombrovskis was counting the last days of his truncated tenure after the collapse of a supermarket roof in a suburb of Riga, the Latvian capital, killed 54 people. Dombrovskis, the 42-year-old wunderkind economist, resigned as prime minister shortly after the tragedy, calling for an independent commission to investigate the incident and arguing that Latvia needed a new government in the wake of the accident.

Though it may have been an act of political integrity, Dombrovskis’s resignation came at a nadir for his shaky minority. His party, the center-right Vienotība (Unity), placed third in local elections in June 2013, and disapproval was running high for his government, a coalition that also includes the more stridently right-wing Nacionālā apvienība (National Alliance) and the center-right Reformu partija (Reform Party).

Unity’s decision to nominate Laimdota Straujuma, the current agriculture minister, as its designate for prime minister is designed in part to boost the party’s chances at winning elections expected in October of this year.

The three parties that supported the Dombrovskis have indicated they will back Straujuma, and a fourth, Zaļo un Zemnieku savienība (ZZS, Union of Greens and Farmers), a union of Latvia’s green party and its agrarian party, will join them, along with three additional independent lawmakers. That support will give Straujuma an immediate boost — while the previous coalition controlled just 50 seats in the 100-member Saeima, Latvia’s parliament, Straujuma’s government will command a 16-seat majority:

That means that when Latvian president Andris Bērziņš formally nominated Straujuma as prime minister, it all but assured that she will command a majority to become the country’s first female prime minister.

So who is Straujuma? And what challenges does she face in the months ahead?

Dombrovskis came to power in 2009 facing a contraction that amounted to 18% of Latvia’s GDP, and he’s presided over Latvia’s resurgence. Latvia has achieved some of the highest GDP growth in Europe — 5.6% in 2012 and an estimated 4% in 2013. That growth has come even while Dombrovskis implemented budget cuts to bring Latvia’s debt to one of the lowest levels in all of Europe and forced upon Latvia a sharp internal devaluation — the kinds of wage cuts that have allowed Latvia to become more competitive. Even his push to join the eurozone was controversial, with nearly half the country opposing the move as recently as a month ago, notwithstanding the fact that the previous currency, the lats, was already tied to the euro.

Though it’s hard to miss the resemblance to German chancellor Angela Merkel, Straujuma comes to power as a former civil servant, and there’s no way to know if she’ll last nine months as head of government, let alone nine years. As agriculture minister, she participated often in negotiations at the EU level over the Common Agricultural Policy, which affects Latvian farmers, and she developed a reputation as a tough advocate for Latvia. But she’ll lead a party that’s massively unpopular and a government that she says will follow roughly the same course:

… the new government must not destroy the state budget for this year, [Straujuma] told reporters last night, reports LETA.

The next government will have to ensure stability, stressed Straujuma. One of the key priorities, that is “of major importance for businessmen and society”, is preparing a program on absorption of European Union funds for Latvia. The European Commission should approve the program by mid-2014 so absorption of the funds could begin in the second half of the year, emphasized Straujuma.

Unity’s Andris Vilks is almost certain to continue as finance minister in the new government, and Reform’s Rihards Kozlovskis and Edgars Rinkēvičs will remains interior minister and foreign minister, respectively. Jānis Dūklavs, a member of the Union of Greens and Farmers, will replace Straujuma as minister of agriculture, a role that he held between 2009 and 2011 in the first two Dombrovskis governments. Raimonds Vējonis, a former environment minister, will become Straujuma’s new defense minister. Continue reading Who is Laimdota Straujuma? Latvia’s likely first female prime minister.→

If for no other reason, the upcoming elections for the European Parliament will be the most important since direct EP elections began in 1979 because under the new Lisbon Treaty, it will be the European Parliament that decides who will become the next chair of the European Commission, the chief executive organ of the European Union (though German chancellor Angela Merkel has argued that the treaty’s language indicates that the Commission appointment need only ‘take into account’ the EP elections). In any event, it still means that early in 2014, each of the major cross-national party groupings within the European Parliament will designate their nominees to succeed José Manuel Barroso, the former center-right Portuguese prime minister who will step down in November 2014 after a decade heading the Commission.

The eight European Parliament will have 751 members, over 56% of whom will come from just six member-states: Germany (96), France (74), the United Kingdom (73), Italy (73), Spain (54) and Poland (51). Four states, Estonia, Malta, Luxembourg and Cyprus, will elect the minimum number of representatives (six).

Between 1979 and 1999, the Party of European Socialists (PES) and its predecessor was the largest group in the European Parliament. Its members include the major center-left socialist/social democratic parties of Austria, the Czech Republic, Denmark, France, Germany, Portugal, Spain and Sweden, and the labour parties of Ireland, Malta, The Netherlands and the United Kingdom.

Since 1999, however, the European People’s Party (EPP), a group of center-right and Christian democratic parties, have held the largest number of seats. In the most recent 2009 elections, the EPP won 265 seats to just 183 for the PES. The EPP’s members include the major Christian democratic parties in Benelux, the Austrian People’s Party, the French UMP, Germany’s Christian Democratic Union Greece’s New Democracy, Hungary’s Fidesz, Ireland’s centrist Fine Gael, Italy’s Forza Italia, Portugal’s Social Democratic Party, Poland’s Civic Platform, Spain’s People’s Party and Sweden’s Moderate Party.

The third-largest group, the Alliance of Liberals and Democrats for Europe Party (ALDE), contains includes most of Europe’s liberal parties, notably Belgium’s Open VLD, the Danish Venestre, Luxembourg’s newly elected Liberals, the Dutch VVD, the British Liberal Democrats, and Ireland’s Fianna Fáil.

Other groups include:

the European Green Party (which includes essentially all of Europe’s green and ecological parties),

the Party of the European Left (whose members include the German Die Linke and Greece’s SYRIZA),

the slightly eurosceptic Alliance of European Conservatives and Reformists (whose members include the Czech Civic Democrats, the UK Conservatives and Poland’s Law and Justice Party),

the Movement for a Europe of Liberties and Democracy, formed in 2009 as another slightly euroskeptic group (whose members includes Italy’s Northern League, the Danish People’s Party and the Finns Party), and

the European Alliance for Freedom, formed in 2010 as a staunchly euroskeptic, far-right group (whose members include the French National Front, the Dutch Party of Freedom, the Flemish Vlaams Belang and Austria’s Freedom Party).

Although the EPP won’t determine its candidate for Commission president until a convention on March 6-7 and ALDE won’t determine its candidate until February 1, the PES has already nominated Martin Schulz, a member of Germany’s Social Democratic Party and president of the European Parliament since 2012. Polish prime minister Donald Tusk, Luxembourg’s Viviane Reding, the Commission’s vice president and current commissioner for justice, former Luxembourgish prime minister and Eurogroup chair Jean-Claude Juncker, former Latvian prime minister Valdis Dombrovskis, Lithuanian president Dalia Grybauskaitė, Swedish prime minister Frederik Reinfeldt and IMF managing director Christine Lagarde of France have all been touted as possible EPP candidates. ALDE will choose between former Belgian prime minister Guy Verhofstadt and Finland’s Olli Rehn, currently commissioner for economic and monetary affairs.

Herman Van Rompuy, former Belgian prime minister and the first president of the European Council, the council of European heads of state/government, will also step down at the end of 2014 after two 2.5-year terms in that position. The first EU high representative for foreign affairs and security policy, Catherine Ashton of the United Kingdom, is also likely to step down.

Given the tumult of the eurozone sovereign debt crisis, almost everyone expects that European voters may use the elections as an opportunity to register dissatisfaction with the direction of European governance. In particular, that could bode well for the stridently leftist MEP candidates — most notably in Greece, where SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς) of Alexis Tsipras leads EP polls. It could also bode well for euroskeptic candidates — most notably in the United Kingdom, where Nigel Farage (pictured above) and his anti-EU United Kingdom Independence Party (UKIP) is competing for first place with the Conservative Party and the Labour Party in EP polls, and in France, where Marine Le Pen’s nationalist Front National (FN, National Front) leads EP polls.

Latvia was formally accepted yesterday as the 18th member of the eurozone, meaning that on January 1, 2014, it will join Estonia as the only former Soviet republic to have adopted the euro as its currency.

That might be surprising given that, in the wake of the 2008 global financial crisis and, in particular, the ensuing eurozone sovereign debt crisis, the eurozone has not been the most popular club.

Malta and Cyprus joined at the beginning of 2008 (we know how well that worked out for one of them), Slovakia joined at the beginning of 2009 and Estonia followed in 2011. But though Croatia recently joined the European Union to much fanfare, and though other Balkan nations are anxious to follow suit into the European Union, there’s little Balkan sentiment to join the eurozone, nor is there an incredible amount of appetite from other more established EU members, like the United Kingdom, Denmark or Sweden, or newer central European countries.

It’s a different story in the Baltic states, though, and it’s not hard to see why — for small states that were swept into the Soviet Union for much of the 20th century, eurozone membership is as much about geopolitical strategy as about economics. It explains why the only other European country on target to join the eurozone anytime soon is Lithuania, the third and final Baltic nation, which hopes to join the euro in January 2015.

Share this:

Support Suffragio

Donation Amount:(Currency: USD)

About Suffragio

Suffragio attempts to bring thoughtful analysis to the political, economic and other policy issues that are central to countries outside of the US -- to make world politics less foreign to the US audience. Suffragio focuses, in particular, on those countries and regions with upcoming or recent elections.